Definition of Medicaid Spending. Total Medicaid spending includes all payments to Medicaid providers for Medicaid covered services provided to enrolled Medicaid beneficiaries. In addition, total Medicaid spending includes special payments to “disproportionate share hospitals” (“DSH payments”) that subsidize uncompensated care for persons who are uninsured and unreimbursed costs related to care for persons on Medicaid. Not included in total Medicaid spending are Medicaid administrative costs and federally mandated state “Clawback” payments to Medicare (to help finance the Medicare Part D prescription drug benefit for beneficiaries who are dually enrolled in both Medicare and Medicaid.) States are also asked to exclude costs for the Children’s Health Insurance Program (CHIP) though a few states provided percentage changes for spending that reflected Medicaid and CHIP combined. Total Medicaid spending includes payments financed from all sources, including state funds, local contributions and federal matching funds. Historical state Medicaid spending refers to all non-federal spending, which may include local funds and provider taxes and fees as well as state general fund dollars. State spending for FYs 2014-2016 collected as part of this survey reflect state spending, largely state general fund dollars.

Methodology. The Kaiser Commission on Medicaid and the Uninsured (KCMU) commissioned Health Management Associates (HMA) to survey Medicaid directors in all 50 states and the District of Columbia to identify and track trends in Medicaid spending, enrollment and policy making. This was the fifteenth annual survey, conducted at the beginning of each state fiscal year from FY 2002 through FY 2016.

The KCMU/HMA Medicaid survey on which this report is based was conducted from June through August 2015. Medicaid directors and staff provided data for this report in response to a written survey and a follow-up telephone interview. The survey was sent to each Medicaid director in June 2015. All 50 states and DC completed surveys and participated in telephone interview discussions in June, July and August 2015. The telephone discussions are an integral part of the survey to ensure complete and accurate responses and to record the complexities of state actions.

At the time of the survey, two states (Illinois and Pennsylvania) had not enacted budgets for FY 2016. For Pennsylvania, the projections for FY 2016 reflect the governor’s estimates provided to NASBO.1 For Illinois, the Governor’s budget anticipated large cuts in Medicaid that may be unachievable given that the timing in the fiscal year so spending data for Illinois is not included in weighted averages for FY 2016.

Annual rates of growth for Medicaid enrollment and spending were calculated as weighted averages across all states, and for states based on state decisions to implement the ACA Medicaid expansion in 2015 or 2016. For FYs 2014, 2015 and 2016, average annual Medicaid spending growth was calculated using weights derived from the most recent state Medicaid expenditure data for fiscal year 2014, based on estimates prepared for KCMU by the Urban Institute using CMS Form 64 reports, adjusted for state fiscal years. These data were also used for historic Medicaid spending. Medicaid enrollment average annual growth rates were calculated using weights based on Medicaid and CHIP monthly enrollment data for June 2014 published by CMS.2 Historical enrollment trend data reflects the annual change from June to June of monthly enrollment data for Medicaid beneficiaries collected from states.3

Because the data reported here for FYs 2015 and 2016 are weighted averages derived from Medicaid enrollment and spending, data reported for states with larger enrollment and spending have a larger effect on the national average. These effects are further amplified when looking at smaller groups of states, such as states implementing the Medicaid expansion and those that have not. Additional information collected in the survey on policy actions taken during FY 2015 and FY 2016 can be found in the companion report at: www.kff.org